Starting a staffing company can be a daunting task... see how we can help you make the transition a smooth one.

1. 10 Tips for Starting a
Temporary Staffing Business
Brought to you by: Prosperity Funding
“The Funding Source for the Staffing Industry”

2. 1. Define Your Market
Most entrepreneurs that start a staffing company come from
within the industry. Some have worked for other agencies as a
branch or regional manager, recruiter, or sales professional.
Others have owned a staffing company, sold their company, then
returned to open a new company. Whatever the background,
defining a specialty staffing area can be the key to your success.
Whether it's concentrating on accounting, finance,
admin/clerical, light industrial, healthcare, IT, or professional
areas, you must define your area of focus. Depending on your
crew, it may be necessary to concentrate on one area first, then
branch out to others as you bring in industry experts from other
areas.

3. 2. Define Your Strengths
Everyone has strengths. Whether it's in sales/business
development, marketing, operations, financial acumen,
or other areas will depend on your role within the
organization. You will want to take over roles matching
your strengths, and leave the other areas to
professionals best suited to handle the other functions
in your business. For instance, if your specialty is
business development, you want to be the one calling
to get job orders and secure contracts. You may want to
bring in an operations professional to handle day-to-
days tasks of running the agency

4. 3. Define Your Weaknesses
This step goes hand in hand with #2, but can
also include specialty areas as well. If you have a
background in healthcare, you will probably
want to attack that marketplace as an expert in
the industry, versus taking on IT or Accounting
clients. Stick with your strengths, and bring in
experts to handle other specialty areas.

5. 4. Get the Basics
The first step in opening a business is to incorporate in states that you are
going to conduct business. I would recommend either going online to your
Secretary of State's website, or visiting a local office to incorporate. Whether
it's as a SubChapter C, S, or LLC, you want to make sure that you distance your
personal business from your staffing business. Consult with your attorney on
setting up your business as a corporation, but putting a layer of protection
from your personal and business assets is paramount when starting your
business. You may want to also consult your Accountant when setting up your
business to inquire about setting your business up on a cash vs. accrual basis
for accounting purposes. Also, if you are going to have candidates
interviewing for positions, you are going to want to consider having a
corporate office location, whether as an executive suite, in a strip center, or in
a separate building. Appearance is everything, and you don't want to be
meeting candidates at your local Starbucks for interviews. Also, be prepared
to contact your phone company for a business line, and consider leasing or
buying office equipment (copy/fax machine, phone system, etc). Office
supplies are also necessary to run your business.

6. 5. Determine Your Insurance Needs
This is the fun stuff, as they say. Nobody likes to buy insurance,
but unfortunately, it's a requirement for running a
temporary/contract staffing business. Minimum insurance
requirements will be for General Liability and Workers Comp.
You may also want to consider having E&O and Professional
Liability Insurance coverages. Find an insurance carrier that
understands the staffing industry! A list can be found under
insurance providers for the American Staffing Association
(www.americanstaffing.net ). If you are a start-up, you may have
to contact your state's Insurance Fund to get your first Workers
Comp policy. However, once you have an established business,
you may be able to gain insurance from a private insurance
carrier. Again, make sure you are dealing with a broker or agent
that understands what your company and the staffing industry.

7. 6. Determine Funding Requirements
Without proper funding, your business is going nowhere. Understanding that you have
to lay out money to incorporate your business, buy insurance, get an office location,
purchase or lease equipment, purchase office supplies will get you to the point of
opening your business. At that point, now you have to hire employees. They will be on
your payroll and covered by your insurance. Now you need to place them on
assignment and they expect to be paid weekly or bi-weekly. Once you bill for your
services, it may take 30, 60, up to 90 days to get paid from your clients. You will have
to carry that payroll for up to 90 days, unless you have a funder who will carry that
payroll for you. You may have put up your savings to get the business off the ground,
but if it takes off, you may run into a cash crunch fairly quickly. There are several
options to cover your payrolling and working capital costs, but again you will need to
find a funding source that understands your business and is able to fund your business
based on the volume of business you generate. Banks these days are being very
cautious about who they lend funds to, so I would recommend your finding a
receivables financing company that specializes in the staffing industry. If you don't
enjoy the administrative functions of running a business, or would like to outsource
your back office (billing, payroll, payroll tax) functions, some funders exclusive to
staffing will not only finance your business, but take on the back office piece.

8. 7. Marketing Your Services
Once your business is set up, now is the time to start
marketing your services to potential clients. Some folks
already have target companies in mind, based on prior
business relationships. Warm calls and referral business
is always preferred to cold calls, but when you are
getting started, you have to utilize any methods to pick
up new business. Joining social networks such as
Linkedin, Twitter, Facebook, or others is a great place to
start. Use your existing contacts to leverage other
contacts. Let everyone you know that you have a
started a new business venture that you are excited
about and want to share.
Network, Network, Network.

9. 8. Find Candidates / Employees
In days past, the only way to find candidates was to pick up the
phone and call into companies, or run a newspaper ad. There's
something to be said about those methods, but with the advent
of the internet, social networks, job boards, etc., finding
candidates has changed. Posting jobs to Monster, Careerbuilder,
Dice, The Ladders, is great, if you can afford to subscribe to those
services. Networking through Linkedin, Twitter, Facebook, and
other social networks can be as effective, and much less
expensive. Joining professional organizations such as The
American Staffing Association, local staffing organizations, or
attending trade shows / staffing conferences can bring credibility
to your organization, and provide excellent networking
opportunities.

10. 9. Become an Expert
People like to deal with professionals they feel
comfortable with, view as an expert in their field, and
provide value to the relationship. Take the time to learn
about the industry, your specialty recruitment areas,
and the clients you plan to call on. View each sales call
as a job interview. Be prepared to discuss your
prospective client's company as if you planned on
working there. Know their business, study their history,
become familiar with their culture. If you are viewed as
an expert in the industry, especially in your field, then it
becomes a matter of finding out if your prospective
client can afford your bill rate and if you can add value
to their organization.

11. 10. Repeat the Process
If you take the proper steps to set up your company
correctly, then it's a matter of building out your
company. You may want to start small, then take on
new business slowly. Or, if the opportunity presents
itself, you may be able to capture unique
opportunities to grow your business quickly.
Remember to define your market, know your
strengths, find an suitable funding source, and
network, network, network.

12. Contact Information
If you would like to discuss starting up your new
staffing company, or expanding your growing
staffing company, give Dale Busbee, VP Business
Development with Prosperity Funding a call
today at (985) 641-8817. Or, send Dale an email
to dale@prosperityfunding.com.